Have you started to plan for next year yet? Having a grasp of your variable and fixed expenses within your business will give you clarity into some key ratio’s and key performance indicators (KPI’s), like your break-even point and targeted profit. Now is the time to make sure your accounting is caught up and up to date, so you can use the historical data to budget and forecast for the next year!
Your break-even point is when the total costs and total revenue are equal, meaning there is no loss or gain in your landscape business. By calculating this KPI you will now have a clear and concise goal to hit. Some of the metrics needed to calculate the break-even point are:
- Fixed costs
- Variable costs
- Total direct labor hours
- Revenue per hour
Watch the video below, where I will walk you through the process of getting to your break-even point and targeted profit: